How to Write a Retail Store Business Plan
The Retail Store industry is a growing trend for several reasons. First, small retail stores can quickly adapt to changing customer needs. For example, some retail stores have embraced delivery services for their products and services. By doing this, not only are small retail stores able to provide traditional customer service that customers expect but also same-day delivery that large online retailers provide as well.
A second reason for the growth in retail stores throughout the US is our society’s desire to work with small business owners instead of large retailers. In the last several years, large retailers have been dominating the retail industry. However, small retailers better-utilizing technology and same-day delivery, have steadily increased market share gains from big-box retailers. As this trend continues, more and more small businesses will enter the retail store industry. Because of these changes, the need for tips and tricks for writing retail store business plans is necessitated.
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Executive Summary for a Retail Store Business Plan.
In the executive summary section of the Retail Store business plan, make sure to first discuss what type of business your organization will be. The different types of business structures may include Corp., limited liability, or sole proprietor. For most retail stores, the business structure is often a limited liability company. Once this is done, the next step in the executive summary section would be to briefly describe the type of products that will be sold in the retail store. Common products for retail stores may include specialty items like bicycles and accessories or a more broad approach like a convenience store selling a range of products from snacks to household needs.
Also, in the executive summary section, make sure to discuss how your business will look and feel for customers. This needs to be short and sweet. For example, just a few sentences will do. Like our store will be traditionally set up with aisles focused on specific customer needs like candy and snacks. Granted, most people can envision how a retail store will look and feel based on the product sold. However, if your business setup is part of your differentiating strategy, then make sure to briefly address it here.
Company Information for a Retail Store Business Plan.
The company information section of a Retail Store business plan should start with explaining the problem that the company will solve for the client, then address the “Who, what, where, when, why, and Hows.” The problem that a retail store solves for customers really depends on the product sold. For example, a pool supply retail store seeks to offer products and services to help customers upkeep their home pool. In contrast, a furniture store retail establishment may seek to offer the latest fashion of furniture to help customers feel trendy. No matter the problem, make sure to fully discuss what it is that your company will help solve.
After this is done, then make sure to tell explaining the business plan, how your company will solve the problem, where your firm will be located, your hours of operation, and a detailed explanation for how your business will solve the customers' problems.
Product Description for a Retail Store Business Plan.
Retail Store businesses generate revenues from selling products within their company. An excellent strategy for product sales would be to identify a core product item like antique furniture. Once the core product item is identified, then our business plan writer recommends the business owners sell complementary products or services. To illustrate, antique furniture retail stores may also offer delivery services and decor that best complements their antique furniture. In doing this, not only will the organization become well known for its antique furniture but it will also be able to increase sales by offering additional services and complementary products.
In addition, retail business owners all too often settle on one or a select few suppliers for their inventory needs. This strategy is beneficial because of convenience factors and the owner's ability to build relationships with suppliers. However, having just a select few suppliers leaves an organization vulnerable to stock-out issues if the supplier cannot meet demand. Because of this critical component for business, our business plan writer recommends having several suppliers. Multiple suppliers may mean higher costs for some products, but for long-term sustainability, the aggravation of multiple suppliers is well worth the effort.
Competitive Advantages for a Retail Store Business Plan.
The Retail Store industry has been growing substantially over the last several years, thanks to their adapting to change and the inclusion of technology. For example, some small businesses in the retail store industry have started to offer same-day delivery for their products. This is possible because small retail stores have a limited delivery area. This allows the organization to either hire one individual to make the deliveries. Or, they can partner with larger delivery services to ensure the products reach customers on the same day.
A second competitive advantage that some retail stores may embrace would be customer service. Large retail organizations are not able to develop individual customer relationships due to their business structure. In contrast, small retail organizations can build and foster customer relationships because of their community roots and hands-on ownership activities.
Location Description for a Retail Store Business Plan
The location for a new Retail Store facility is critical for the success of the business. For the interior of the business, retail stores usually range from about 1500 ft.² to 5000 or more square feet. For the most part, retail stores devote 80% or more of their square footage to showroom activities like stocking products and product displays. The other 20% is often storage or office space.
As for the general location of the Retail Store facility, our business plan writer has found that these types of businesses do well in locations near subdivisions in large apartment complexes. Because of the personal service that retail stores offer, being close to large population segments is necessitated. In some instances, though, a warehouse setting may be more in line with the retail store. This is often true for furniture sales and bulk item sales.
Target Market for a Retail Store Business Plan.
A common Retail Store target market is either the community for which the business is located or the user of a specialty item. If a retailer offers specialty products like clothing furniture, then the target market will be the demographic that best appeals to the product offering. An example of this would be a woman’s clothing retail store that would target women. In contrast, a retail store selling gasoline, snacks, and everyday household needs would target local residents. By understanding the target market, retail store business owners may use this information when determining decor and business model structures.
Industry research for a Retail Store Business Plan
Based on quick research from our business plan writer, the main industry in which Retail Store competitors to compete in the small specialty re-still stores. Specialty retail stores have a wide range of products that they may offer. For example, specialty retail stores may include antique sales, cigar sales, to tombstone sales. Because of the wide range of products, industry threats, and opportunities vary.
An important threat to this industry would be online retailers. In the last several years, our society has been trending towards using online retailers for specialty products. However, as more and more small specialty retail stores enter the online industry, customers have preferred to use the sources for purchases as compared to big-box large retail organizations. An opportunity for this industry would be continually increasing income for US citizens. Retail store items are often considered discretionary items. In other words, the more money that a person has, the more money they’re willing to spend on discretionary items or items they don’t really need. From this, as the economy continues to grow, business owners may exploit discretionary spending by offering differentiated specialty products that may only be purchased from their location.
Owner and Management Section of a Retail Store Business Plan
Owning and managing a Retail Store business is quite different from other organizations. This is because owners often work in their retail store location as well as own it. Because of this, retail store owners wear many hats like Stocker, CEO, cashier, and even janitor. When writing a business plan for a retail store business, make sure to still differentiate each job item in your owner and management section. Just because one person base fits each position does not mean that as a company grows, new employees will not be added.
Funding Request for a Retail Store Business Plan
Starting in the Retail Store business is actually quite expensive. Business owners need to build out a retail store organization to best meet the expectations of customers and store their wide array of products. Also, advertising for retail stores is often quite expensive. When writing the funding request section 4 retail store, first start with the startup cost. The startup cost may include purchasing initial inventory, architecture design for the front of the building, and purchasing vehicles for delivery. Next, make sure to then identify your working capital needs. Sometimes, retail stores take a little bit of time to build brand recognition. Between startup and elevated sales, business owners need capital to keep the lights on. Once this is done, the funding requests should then be the total of startup costs plus working capital.
Financials for a Retail Store Business Plan.
Financial projections and financial models for a Retail Store business plan should first start with daily sales. Daily sales may include estimated first-day sales for core products and complementary products and services. Next, the business owner should identify the cost of each product sold. Once this is done, the revenues and variable costs should be multiplied by 30 to reach daily sales and variable costs monthly for the company. Once this is done, the business owner should then deduct monthly expenses like retail store leases, delivery vehicle car or truck payments, and utilities like water and air conditioning. In the end, the business owner now has a working net profit for the month that may then be expanded to a yearly and five-year basis.
Hopefully, these insightful tips and tricks for writing a business plan were helpful. As always, if you need help with a business plan or financial projections, just send us an email or give us a call.
Author: Paul Borosky, Doctoral Candidate, MBA., Author